■ James Mulva served as president and chief executive officer of
Phillips Petroleum Company. During his tenure at Phillips, Mulva guided
the company into profitable markets in Europe and Russia and headed the
successful merger of Phillips with Conoco to form ConocoPhillips.
Coworkers and industry peers described Mulva as a capable leader who was
able to implement new technology, learn from other companies'
mistakes, and direct financial decisions to meet and exceed corporate
goals.

AN INTRODUCTION TO THE IMPORTANCE OF OIL

After graduating from the University of Texas with a BBA in finance and an
MBA in business administration, Mulva immediately

James J. Mulva.

AP/Wide World Photos

.

began a tour of duty in the U.S. Navy. During his first two years in the
Navy, he was stationed on Bahrain Island. At that time, Bahrain and Saudi
Arabia were producing enormous amounts of oil and natural gas, and Mulva
was able to learn about the size and importance of the energy industry.
After exposure to the production side of the sector, Mulva became
intrigued by the complexity and geopolitical impact of the financial
aspects of the energy industry.

USING FINANCIAL SKILLS IN A CORPORATE SETTING

In 1973 Mulva completed his tour of duty in the Navy and decided to enter
the energy industry in the financial end of the business. During his job
search, Mulva found a position in the treasury department at Phillips
Petroleum Company that was
a good entry-level fit. This job provided Mulva with the challenge he was
looking for as well as practical financial knowledge and an introduction
to the petroleum industry. Although Mulva had begun at Phillips without a
plan to become a high-level executive, he was promoted based on his hard
work and his ability to analyze a situation and determine a solution that
resulted in profit to the company.

GOING GLOBAL

Mulva worked carefully through successive positions at Phillips to build
the company's long-term security and assets. This work called for
an understanding of the global market and culture before many U.S.
companies in the sector had ventured outside the United States. As vice
president and treasurer of the Europe/Africa division of Phillips from
1980 to 1984, Mulva had to make critical oil-related decisions about where
to focus assets. During a time when many oil companies were drilling in
the Middle East, Mulva avoided Middle Eastern oil purchases and
concentrated instead on new finds in other world locations. For example,
in 1994 Phillips began focusing on the first offshore oil field in China
to begin oil production. After becoming CEO of Phillips in 1999, Mulva
continued this trend to keep assets focused in the North Sea, Venezuela,
Asia, North America, Kazakhstan, and Russia. By concentrating on new
markets in Europe, South America, and Asia, Mulva made a stable long-term
investment that avoided acquisition of assets in volatile Middle East
reserves.

Mulva did not completely avoid volatile markets. In June 2004, when Russia
began to privatize its oil industry, Mulva strongly pursued a 25 percent
share of the Russian oil company Lukoil. He believed that he would have
the ability to make the companies more efficient and profitable and
increase assets while stabilizing the Russian economy. Although Mulva felt
that his plan would enhance the business and social climate in Russia, the
long-term success of Mulva's Russian proposal was still unknown in
the early 2000s.

Beyond purchasing assets in foreign markets, Mulva tried to pass on to his
counterparts in foreign oil companies some of the knowledge he gained by
entering the global market early in its development. Mulva focused on
executives in foreign oil companies in such countries as Russia and China
by helping them train their management personnel, handle new technology,
and cooperate with transnational companies.

NOT JUST GAS

Although Phillips Petroleum Corporation was not immediately associated
with plastics production, a large portion of the global industry Mulva was
working with in Asia included production of polyethylene plastics made
from natural gas liquids. In 1996 Mulva assisted Phillips in creating a
joint venture agreement to produce polyethylene plastic in China. By the
time Mulva became CEO in 1999, Phillips was also involved in the
manufacture of polyolefin plastics and other chemicals.

NEW TECHNOLOGY

Mulva's career in the petroleum industry spanned several
technological changes in the way the industry obtained oil. The land-based
oil derricks in Oklahoma discovered by the Phillips brothers had been
replaced by offshore drilling and creation of pipelines. New refinery
processes meant application of new technology and, with it, new
regulations. In the face of these changes, Mulva advocated creation of a
federal system of regulations that refiners should accept "because
that is what their customers, stakeholders, and constituents are
demanding" (
Oil Daily
, March 25, 2003).

In 2004 Mulva led ConocoPhillips to join a U.S. Department of Energy pilot
project experimenting with the use of hydrogen-based transportation. As
part of the project, ConocoPhillips planned to equip several fueling
stations with the ability to dispense liquid and gaseous hydrogen made
from both fossil fuels and renewable energy sources. Although the
hydrogen-based technology was in its infancy, the project allowed
ConocoPhillips and the other members of the project team to evaluate
hydrogen's potential as a new transportation technology. Mulva
recognized that to ensure long-term growth for the company, ConocoPhillips
had to become a leader in the pursuit and implementation of cleaner energy
sources. Mulva underlined his commitment to new sources of fuel by
actively seeking out such projects as the U.S. Department of Energy pilot
project on hydrogen-based technology.

In addition to leading the industry in the examination of new technology,
Mulva looked toward increased benefits for customers. Mulva and his team
developed the ConocoPhillips "fleet card," a credit card
that can be used at Conoco gas stations, Phillips 66 gas stations, and 76
gas stations. Unlike other gas company cards, it is accepted at many local
maintenance facilities as well. To assist clients with tracking and paying
their bills, online account management is available.

MANAGEMENT STYLE

Mulva's financial background allowed him to analyze new ideas and
proposals carefully, to examine the bottom line, and effectively to
predict the ideas' long-term financial impact on the firm. This
methodical approach helped him create a strategic plan to meet and exceed
corporate goals and decide which new technologies would be profitable.
Mulva also maintained a level of transparency in his actions that
emphasized his honesty in business. As he frequently said, "If you
don't have your health and your integrity, you don't have
much to offer" (
ConocoPhillips
Newsroom
, May 16, 2003). This transparency increased in importance in 2001, when
it was learned that energy executives at Enron, an interstate and
intrastate natural gas pipeline company also involved in trade of
commodities, had manipulated financial statements to create an illusion of
success. The discovery of the deception resulted in a financial crash that
lost investors' money and bankrupted the company. After the Enron
scandal, regulators took a close look at other energy companies and their
executives. Mulva's policy of transparency and honesty protected
Phillips from suspicions of financial mismanagement. In 2002
Mulva's peers acknowledged his leadership and ability in an
increasingly difficult business environment by presenting to him the
Petroleum Executive of the Year award.

COMMUNITY OUTREACH

Given Phillips's global presence, Mulva felt that it was important
to try to bring something other than jobs and oil to its operation
locations. Primary among these goals was Mulva's desire to ensure
that the company's operations did not have an adverse impact on
community health and safety. This meant that proper safety measures had to
be put in place to avoid increases in air, water, and land pollution as
well as to protect the community from product spills. Also important to
Mulva was the concept of contributing to the communities in which
Phillips's employees worked. Phillips, and later ConocoPhillips,
supported business internship programs, continued scholarship programs
(such as the Phillips 66er's Scholarship Program), and established
the Phillips Petroleum Endowed Professorships and Exchange Fellowships.

ENVIRONMENTAL CONCERNS

In 2000 Mulva faced a tragic situation when a K-resin chemical tank
exploded at a Phillips Petroleum Company chemical plant in Pasadena. The
explosion killed one worker, seriously burned four workers, and injured 65
other employees. The resulting fire also produced toxic fumes that spread
over the surrounding neighborhoods. The blast was especially worrisome
because it was the third time in 11 years that an explosion had occurred
at that plant. In the wake of the disaster, Mulva had to answer
accusations that Phillips's attempts to cut costs had endangered
their employees, created an unsafe work environment, and resulted in the
large explosions. To salvage Phillips's reputation for safety and
its concern for its workers, Mulva and Phillips paid a large Occupational
Safety and Health Administration (OSHA) fine for safety violations,
concentrated on improving plant safety, and cooperated with investigators
to help establish accountability for the explosions.

Following the 1989 Exxon
Valdez
incident, in which approximately 11 million gallons of oil were spilled
out of a damaged oil tanker off the coast of Alaska, worldwide public
attention was focused on petroleum companies and their environmental
records. Although Mulva's time as CEO did not begin until five
years after the spill, the
Valdez
's legacy and legislation were a constant concern that shaped the
operations of the petroleum company. As Phillips's CEO, Mulva
focused on the environmental impact of petroleum operations. He was
determined to learn how to increase Phillips's holdings of oil
through exploration and production without damaging the environment. Given
the ability of most of Phillips's products to cause environmental
destruction if spilled, Mulva directed frequent safety inspections of
production operations, trained employees in safe practices, and instituted
more safety measures to ensure that an incident like the
Valdez
accident would not occur.

CAREFUL ACQUISITIONS AND MERGERS LEAD TO PROFIT

As CEO of Phillips, Mulva created a five-year strategic plan that used
several mergers and acquisitions to make the company more competitive and
increase oil exploration and production. Through increasing oil
exploration and production, Phillips hoped to avoid being taken over by
the huge companies resulting from the mergers of medium-sized businesses,
such as Exxon and Mobil and Chevron and Texaco.

In February 2000 Phillips joined its chemical and plastic operations with
Chevron to create the Chevron Phillips Chemical Company. For Phillips, the
plastics and chemical portion of the company began to decline in strategic
importance as an asset as Phillips focused on a new strategic plan for the
oil-and-gas sector of the business and a series of explosions at Phillips
plants in 1999 and 2000 created public image problems. Through the
spin-off and joint venture, Mulva helped create a global chemical
production company with an excellent financial position, more assets, and
enhanced growth prospects.

In April 2000 Mulva led Phillips in the acquisition of the Alaskan
oil-and-gas production assets of the Atlantic Richfield Company in an
attempt to boost its upstream exploration and production. The Alaskan
assets were sold to satisfy the terms of a legal settlement that resulted
from the large BP Amoco/Arco merger. The assets augmented
Phillips's holdings in a nonvolatile location and increased the
company's barrels of oil equivalence to 2.2 billion reserve barrels
of oil and 340 thousand new barrels per day of production.

The 2001 merger with the Tosco Corporation, a refining, marketing, and
transmission business, helped Phillips grow its refining business to
become the second largest in the United States and the third-largest
seller of motor gasoline in the United States. Phillips also added
Tosco's large convenience
store market and 6,400 gas stations to its lists of assets. Next came
Phillips's merger with Conoco to become ConocoPhilips. Nationally,
this merger moved the combined company to a position as the largest
refiner in the United States and the third-largest energy company.
Internationally, the merger put ConocoPhillips into position as the
sixth-largest energy company in the world. At the time Mulva became CEO in
1999, the company's assets were about $15 billion; after the merger
was completed in 2002, the company's assets exceeded $75 billion.
Mulva had learned more about large oil company mergers by watching
carefully the successes and failures of the merger of Mobil and Exxon in
1998 and Chevron and Texaco in 2001. He chose a financial strategy that
focused more on saving money and cutting capital spending than on growth
in the first years. The strategy produced enhanced financial returns and
less debt for ConocoPhillips. By the end of the first quarter of 2004, the
company had an income of $1.9 billion and had come very close to paring
its debt down to 32 percent of its capital.

See also
entry on Phillips Petroleum Company in
International Directory of Company Histories
.